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Radical new powers which could give Reading greater independence from central Government could be given to the town after Deputy Prime Minister Nick Clegg invited it to join a new scheme.

The Government says that in order for “Britain to prosper we need Reading to prosper”, and has invited the town to bid for a City Deal, which could give Reading Borough Council greater control over finances, taxation and even public transport.

Council leader Councillor Jo Lovelock says the invitation is a “vote of confidence in the region” and that it shows Reading is an “economic powerhouse”.

Reading’s Local Enterprise Partnership will now have to put together a bid to show how it could operate with greater independence from central Government and manage its own growth by January 15, 2013.

A decision would be made by November next year, but it does not mean Reading would become a city if it is successful.

The aim is to encourage private sector growth and accelerate decentralisation. The first wave of City Deals, for England’s eight largest cities, was announced in July.

Mr Clegg said: “I want Reading to come up with ambitious and innovative proposals to help them make changes that will be felt by everyone across their region.

“In the best English tradition we have witnessed a quiet revolution across the nation’s eight largest cities.

“From control over buses and trains and the freedom to plug skills gaps, to powers to ‘earn back’ tax and set up local investment funds to spend on local projects – the deals are unlocking the huge potential of our cities so they can go for growth.

“Now it’s time to free even more places from Whitehall control.”

One of the first deals to be agreed was the The Manchester City Deal. Its successful bid included a skills hub, a business growth hub, a low carbon hub, a housing investment fund and devolution of transport funding.

Reading Borough Council now has to decide its priorities.

Head of economic development for Reading UK CIC Richard Byard said: “It’s about supporting the Government’s growth agenda.

“It has to be strategic, mid to long term and have strong private sector engagement. It also has to have strong governance arrangements.”

Also in the second wave of City Deals are Swindon, Oxford and Milton Keynes.